Lawmakers file new versions of TRABAHO bill

MANILA, Philippines — Several lawmakers have filed bills seeking to lower corporate income tax rates and rationalize fiscal incentives in the country, the Department of Finance (DOF) said over the weekend.

In a phone interview, Finance Assistant Secretary Antonio Lambino said three or four House bills, similar to the second package of the Duterte administration’s Comprehensive Tax Reform Program (CTRP), have been filed by members of the 18th Congress so far.

Asked which version would be backed by the DOF, Lambino said the agency would have to “study them carefully,” but noted that all of them are similar to the DOF’s own proposal.

“We have to look very closely at the versions that were filed. But we’re happy that [there are] a number of legislative sponsors already who support it,” he said.

According to Lambino, the bills filed and the original DOF proposal contain the same core elements, particularly the cut in corporate income tax rates and rationalization of fiscal incentives.

However, he noted that the DOF wants to have a version similar to the one approved by the House of Representatives on third and final reading during the previous Congress as the foundation for a new bill.

“That is the basis of the work that we’ll be doing in the next few months,” Lambino said.

The House of Representatives in September 2018 had approved on third and final reading House Bill 8083, or the Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill.

The bill seeks to reduce the current 30 percent corporate income tax (CIT) rate––currently the highest in the region––by two percentage points every two years starting 2021 until it reaches 20 percent in 2029.

It also aims to reform the country’s fiscal incentives system to make it more targeted, transparent, time-bound and performance-based.

Lambino said the DOF continues to look into a measure that is revenue neutral, much like the previous House version.

He said it would also depend on the new members of Congress if they want to retain the measure’s brand as the TRABAHO bill, or if they want to rename it.

The Duterte Cabinet’s economic development cluster has previously identified package two as well other packages of the CTRP as among the administration’s priority legislative agenda for the 18th Congress.

Lambino said he was confident that the second package will be passed within the year.